Workshop on Power Purchase Agreements

For any kind of energy projects realized as IPP projects, a well-designed power purchase agreement (PPA) has an important influence not only on the energy prices to be paid by the purchasing entity, but as well on of the successful construction and operating of the respective energy plant. The specificities of PPAs for renewable energy IPP projects were discussed in depth by Algerian energy sector participants and renewable energies and PPA experts from KfW development bank.

Starting from key aspects as the ideal length, tariffs and risk sharing, the consultants covered financial as well as technical aspects (e.g. utilization/identification of sites) and legal questions to be considered, as for example, the settlement of disputes.

An example PPA was examined jointly by German and Algerian experts, discussing its advantageous and less advantageous parts.

In the afternoon, a KfW PPA expert and former project developer explained the relevant conditions making a PPA bankable, and the following exchange focused around the question if these conditions were met or how they could be met in Algeria, following the example of countries with a similar economic and financial context.